Asset Mix

The policy asset mix of each portfolio reflects the return requirement and risk tolerance established by the University, taking into account the liability characteristics and payout requirements of each fund.

The current return and risk parameters of each fund are as follows:


	PENSION	LTCAP	EFIP
RETURN TARGET	4% real return plus fees and levies	4% real return plus fees and levies	365-day Canadian T-bill Index plus 0.5%
RISK TOLERANCE	10% annual standard deviation of nominal returns over ten years	10% annual standard deviation of nominal returns over ten years	minimal volatility

Using the approved return/risk parameters, UTAM develops an appropriate policy asset mix for each portfolio. The policy asset mixes are reviewed and approved annually by the UTAM Board. In addition, benchmarks are established for each asset class and these are submitted for approval by the University.

The policy asset mix for Pension and LTCAP is as follows:

Equities		50.0%
Equities - Public
Canadian	12.5%
US	12.5%
International	15.0%
Equities - Private	10.0%

Fixed Income		17.5%

Real Assets (real estate, infrastructure, commodities)		15.0%
Hedge Funds		17.5%
		100.0%

The policy asset mix for EFIP is as follows, and is based on a reference level of $600 million:

Cash and Equivalents	40%
Short-Term Bonds	40%
Medium-Term Bonds	10%
Hedge Funds	10%
	100%

For EFIP, the asset mix reflects a need for high liquidity to meet seasonal cash demands and longer term investments to enhance return.

This page was last updated June 11, 2010